Supercuts 2012 Annual Report Download - page 6

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Table of Contents
Narrative Description of Business
The following topical areas are discussed below in order to aid in understanding the Company and its operations:
Background:
Based in Minneapolis, Minnesota, the Company's primary business is owning, operating and franchising hair and retail product salons. In
addition to the primary hair and retail product salons, during fiscal years 2012 and 2011 the Company owned Hair Club. As of June 30, 2012,
the Company owned, franchised or held ownership interests in approximately 12,600 worldwide locations. The Company's locations consisted
of 9,738 company-owned and franchise salons, 98 hair restoration centers, and 2,811 locations in which the Company maintains a non-
controlling ownership interest of less than 100 percent. Each of the Company's salon concepts offer similar salon products and services and
serve the mass market consumer marketplace. The Company's hair restoration centers offer three hair restoration solutions; hair systems, hair
transplants and hair therapy, which are targeted at the mass market consumer.
The Company is organized to manage its operations based on significant lines of business—salons and hair restoration centers. Salon
operations are managed based on geographical location—North America and International. The Company's North American salon operations
are comprised of 7,324 company-owned salons and 2,016 franchise salons operating in the United States, Canada and Puerto Rico. The
Company's International operations are comprised of 398 company-owned salons in the United Kingdom. The Company's worldwide salon
locations operate primarily under the trade names of Regis Salons, MasterCuts, SmartStyle, Supercuts, Cost Cutters, and Sassoon. The
Company's hair restoration centers are located in the United States and Canada. During fiscal years 2012 and 2011, the number of guest visits
at the Company's company-owned salons approximated 90 and 91 million, respectively. The Company had approximately 52,000 corporate
employees worldwide during fiscal year 2012.
On August 1, 2007, the Company contributed 51 of its wholly-owned accredited cosmetology schools to EEG in exchange for a
49.0 percent equity interest in EEG. EEG is the largest beauty school operator in North America with 105 accredited cosmetology schools with
revenues of approximately $180 million annually and is overseen by the Empire Beauty School management team.
4
Topic
Page(s)
Background
4
Industry Overview
5
Salon Business Strategy
6
Salon Concepts
8
Salon Franchising Program
15
Salon Markets and Marketing
16
Salon Education and Training Programs
17
Salon Staff Recruiting and Retention
17
Salon Design
17
Salon Management Information Systems
18
Salon Competition
18
Hair Restoration Business Strategy
19
Affiliated Ownership Interest
20
Corporate Trademarks
20
Corporate Employees
20
Executive Officers
20
Governmental Regulations
21